Income Tax 25 Jan,2020
Expectations of Salary Earners and Other Non-Businessmen
S. KrishnanCA


Union Budget 2020 is just around the corner and everyone including salary earners family pensioners and other non-businessmen have a list of expectations from the Finance Minister.

A few of them are listed below-

1. Regarding cap of Rs. 2 lakhs placed under the head "Income from House Property"

Maximum loss that can be claimed by an assessee under the head "Income from House Property" on account of payment of interest is only Rs. 2 lakhs and the balance of loss has to be carried forward for a specific number of years. Most of the salary earners who are employed in middle level management, purchase residential properties taking loan from Banks and the period of loan extends to 15 to 20 years and so interest component is quite heavy. With a ceiling of only Rs. 2 lakhs to be carried forward, there is no way by which the entire interest component could be covered by the salary earner. Then what is the solution? The salary earners earnestly hope that this ceiling be removed.

If the government is not inclined to remove this ceiling, a similar cap of Rs.2 lakhs may be allowed for the second property also as exemption from self-occupied property has been extended to two houses with effect from the financial year 2019-20.

2. Increasing deduction under Section 80C

The deduction under section 80C available at present is only Rs.1.50 lakhs which is quite inadequate and the same may be increased to Rs.2.00 lakhs. Like some exemptions/deductions which are available only while computing "Income from Business or Profession" applying the same logic this increased deduction under section 80C may be made applicable only to salary earners and pensioners.

3. Regarding benefits to Family Pensioners

Family pension received is taxable under section 57 of the Act under the head "Income from other Sources" and maximum deduction allowable is only Rs.15,000/- which was fixed long time back on 1st April 1998. The family pensioners would be happy if the Government exempts family pension totally from the purview of taxation. If the Government is not willing to grant such a benefit to the family pensioners, it may grant at least 16(1) deduction to such pensioners.

4. Shifting of due date fore filing of return from 31st July to 31st August

The due date for filing of income-tax return for non-businessmen may be extended to August 31st from July 31st. Though the salaried employees have the option of reporting other income to their employers enabling them to deduct tax at source (TDS) on that other income also, the employees seldom do this or report only part of their income. Most of the employees and other non-businessmen thus have to wait for Form 16A from the deductors or Form 26AS for exhibiting their tax deduction. But only when TDS return is filed, the tax paid by the deductors is exhibited in Form 26AS. When the time for filing TDS return gets extended till June 30 like last year most of the employees would get their Form 16 and updated Form 26AS only by July 10. In order to overcome this difficulty, taxpayers would be comfortable if the date for filing of income-tax return for salary earners and non-businessman gets extended to August 31 through necessary amendment in the Finance Bill/Act instead of extending through a Board Circular in the last minute.

5. Revised due dates for payment of advance tax for salaried class

The due dates for payment of advance tax for all assessees are 15th June,15th September, 15th December and 15th March as of now.

The salaried class would be benefitted if the government shifts the first advance tax date from June 15th to September 15th. The salaried class assessees are liable to pay advance tax for their other income as taxes on their other income would be deducted only at 10 per cent whereas their total income will be in different brackets (rates of tax). During June, most of the salary earners have to spend on the educational expenses of their children, which are quite high nowadays, and so they may not be left with enough money to pay the first instalment of advance tax on or before June 15th. The shift in the deadline from 15th June to 15th September may help such taxpayers to pay their first advance instalment tax on time.